Microsoft has dropped plans to include a controversial software that can reroute web surfers to any website the company favours.

The change of strategy for Microsoft's new flagship product, Windows XP, has prompted some analysts to herald a new humility within the software giant.

Microsoft says that XP, due to be released in October as the latest Windows operating system, will be shipped without the contentious 'smart tag' technology.

The feature, which can turn any word on a web page into a link, and allow surfers to be diverted on to Microsoft sites, has been condemned by observers who believe it could allow the software giant to tighten further its grip on internet markets.

And Microsoft spokesman Jim Cullinan admitted there were "legitimate concerns" over smart tags.

"Because of the short amount of time before XP ships, we don't believe we have the appropriate amount of time to incorporate feedback and make the changes," he said.

Feeling pressure?

The move, unveiled before the release of Thursday's appeals court decision criticising Microsoft business tactics, was seen by analysts as evidence of a more co-operative attitude in the firm.

"From Microsoft's perspective, it is starting to get more careful about what it does and how it makes its business arrangements," said Chris Le Toq, a software industry analyst at Guernsey Research.